Saga's spending spree lures grey pound back through the door

Over-50s insurer Saga’s spending blitz to get more customers has started to pay off despite warning about rising underwriting costs in the second half.

The company grew home and motor insurance customer numbers by 19% after several years’ flatlining.

Chief executive Lance Batchelor is spending £10 million a year on marketing to tap into the grey pound while also slashing costs.

“We can measure it very carefully,” said Batchelor. “What we tend not to do at Saga is to spend £10 million more on TV and hope it works. We tend to be much more digital and much more targeted.”

Home insurance underwriters are set to increase their prices due to one-off weather hits, the firm said. Motor premiums also continue to weaken due to more competition. However Saga stuck to its full-year sales and profit forecasts,

Shares in the company rose 1% up 1.37p to 127.37.

Pre-tax profits including the benefits of some hedging derivatives rose 3.2% to £109 million.

Saga is set to launch a new £300 million cruise ship next year called the Spirit of Discovery.